Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 10 - No. 32)
When a business reduces its provision for doubtful debts, what happens to the value of trade receivables and profit recorded in the financial statements?
Increases the value of trade receivables and profit.
Decreases the value of trade receivables and profit.
Increases the value of trade receivables and decreases profit.
Decreases the value of trade receivables and increases profit.
Explanation
Reducing the provision increases profit and the value of trade receivables.
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